Reduce the cost of capital
In his Rational Expectations column “Just acchhe sitare, or more?” (FE, December 15) Sunil Jain has aptly highlighted the actions that will need to be taken by the Narendra Modi government for boosting the economy. Labour has been the favourite whipping boy for employers; they seek instant solutions to problems that have accumulated over several decades and also seek a solution to the myriad problems affecting the Indian economy in less than a year, though for several decades the promise of labour reforms never materialised. Many small things have been done that will impact the environment significantly. Apprenticeship Act has been amended, transparency and rigours of Licence Raj and prosecutions have been blunted, Factories Act, Contract Labour Act, etc, are small but significant steps; some states have already moved ahead, such as Rajasthan. Now Modi’s mantras are being remodelled in different states. That is a good sign. However, for any business, capital costs are critical to determine the economic viability. Unless Modi is able to do something to reduce the cost of capital, other reforms, including labour reforms, will have no meaningful effect and companies will not be making a beeline to India to make in India.
R Krishna Murthy
Director, Industrial Relations Institute of India, Mumbai
Apropos of the Regional Cafe column “City of aroma” (FE, December 15), now sandalwood cultivation is also taking place in the attar heartland of Kannauj. While the government has been encouraging farmers to plant sandalwood trees, the moot question is will the new plantations of sandalwood bring down the price of the raw material and give a new spurt to the floundering traditional attar industry? After all, synthetic oils that have the aroma almost like sandalwood are not only inexpensive but can be produced on a much larger scale. Perhaps now the focus should be on how to market “real” sandalwood oil better.
Gopal Das, Kanpur
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